9 of 9 people found the following review helpful:
5.0 out of 5 stars
Predicting New Product Success, January 23, 2006
It is often said that the number one rule of the inventing game is not to reinvent the wheel. In other words, don't put a great deal of effort, time, and money into developing a product unless you first take the time to find out if your proposed product has been already been invented.
More than one entrepreneur has been shocked to find that his or her item has already been brought to market and has been rejected by the consuming public.
The number two rule may be said to be to view your invention objectively. Relying on the opinions of friends and relatives can be fatal. The question then becomes can anyone predict if a product will be a success in the marketplace. This book examines "the big business of buying and selling predictions."
The author, William A. Sherden, is a consultant to some of the nation's largest international corporations. He has made a study of sixteen types of forecasting and has come to the conclusion that "only two--one day-ahead weather forecasts and the aging of population-can be counted on; the rest are about as reliable as the fifty-fifty odds in flipping a coin."
If one of the nation's most respected consultants has come to the conclusion that you and I are just about as accurate as the very best, how can an individual determine if his or her product will make the grade? He explores the history of seven forecasting professions. For the entrepreneur or inventor, Chapter Six, Science Fact and Fiction" is the chapter to read and reread. The chapter covers the predicting of future technologies. He cites that up until 1800 the general public had little reason to be excited by technological progress. In fact, prior to 1800 "most mills, ships, and carriages were still powered by animals, wind, and water, much as in the days of ancient Greece and Rome." It was science fiction writers, such as Jules Verne and H. G. Wells, that excited the public to the idea of predicting future technologies.
The author describes a dozen analytical tools for technology forecasting, such as S-curve, Delphi method, and Trend Analysis. He comments that "Despite their fancy names, these techniques are useless in predicting the most significant events in the evolution of technology." He further notes "...long-term technology predictions have been wrong about 80 percent of the time." Interestingly the world's largest forecaster, the Japanese government, has about the same rate of failure.
However, there is one glorious ray of hope for inventors. That is that major innovations "seem to come out of the blue." Experts are often wrong. A noted physicist, just seven years prior to the Wright brother's successful flight, expressed his opinion that only the balloon could be used for manned flight. Just before the first man-made satellite circled the earth a famous astronomer announced "space travel is utter bilge." Western Union turned down Bell's telephone patent because "The public simply cannot be trusted to handle technical communications equipment..."
Probably the greatest barrier to predicting future technology is what the author calls "situational bias." We think in terms of what already exists and think developments are only extensions of existing devices rather that the creation of a whole new field. For example, even Marconi visualized his radio as being mainly useful in areas where telephone wires could not be put up. To this day the British refer to radio as the "wireless."
The author writes that many great innovations result from combining different technologies. This also complicates any efforts to predict. Quite often it is an individual inventor that sees the possibilities of combining technologies to achieve new results rather than experts in the technologies. On the negative side an inferior product may "lock-out" a superior product if it is there first and becomes the industry standard. For example, the "QWERTY" keyboard cannot be replaced by better arrangements because of the vast number of people proficient with it.
Another caution to innovators is that commercial success can be long time coming. He notes the Battelle Institute has estimated nineteen years on the average. He points out companies "on the leading edge," are also often referred to as "on the bleeding edge."
The author makes a case for more government grants for small-scale research projects. He cites the massive space program, which is often claimed to have created many new by-products, has, in his opinion, only produced Tang!
If you read the book, will it enable you to predict your product's future? Probably not, no one can. However, it may open your eyes to some of the pitfalls even the greatest reputed "experts" make. It is an easy read, an enjoyable read, and an educational read.
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8 of 8 people found the following review helpful:
5.0 out of 5 stars
Prediction in a complex world. Sherden debunks false prophets and shows why market (or weather) picking is a risky business., January 30, 2006
This review is from: The Fortune Sellers: The Big Business of Buying and Selling Predictions (Hardcover)
The marketplace is full of purported gurus who can beat the market, and full of players who would love to know how to beat the system. In this volume William Sherden does an absolutely glorious job of debunking the trend-meisters (in weather, in population forecasting and in the sharemarket) to show us why prediction is a harder business than many of us might guess.
Peppered with supporting evidence, he shows how "fools forecasting" (tomorrow's weather will be the same as today's) has a stronger track record than the scientific weather forecasts we see each night on television. In population forecasting the standard technique of subtracting deaths from births (and adding in migration) is shown to be wonderfully accurate until...until turning points that nobody can forecast. The baby boom after WW2 was expected to last 2 years. It lasted more than a decade.
When it comes to market prediction, Sherden palpably opens up his engines of argument: full throttle. He carefully dissects various marketing picking models and shows that their successes are generally outweighed by their failures. This makes strangely entertaining but high salutary reading. The warning to readers: don't get carried away by any system - in a complex world the rules change faster than any of us learn to play the game.
Two books that would go nicely with this volume is Ellis' recently published: "Ahead of the Curve" (a market forecasting system that looks more solidly founded than others) as well as "Six Degrees" by Duncan Watts, a book that explores the volatility and randomness of the world around us.
I loved "Fortune Sellers": I loved the case studies and I enjoyed Sherden's well-researched, clear writing. He makes technical aspects of his subject very understandable without resorting to over-simplification. Well recommended.
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7 of 7 people found the following review helpful:
5.0 out of 5 stars
An excellent survey of the field of prediction, March 8, 2002
This review is from: The Fortune Sellers: The Big Business of Buying and Selling Predictions (Hardcover)
Sherden sets out to do what no one else seems to want to -- evaluate people who make predictions based on the accuracy of their predictions. And with a few exceptions, the evaluation is very much "thumbs down."
What Sherden doesn't do is tell us why people continue to believe predictions, and why billions of dollars continue to be spent based on predictions that aren't any better than throwing darts. But that's a good topic for another book.
This book is absolutely required reading for anyone who wonders whether stock analysts or economists really know what the future holds. The answer is simple: they don't.
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